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Emmerson finalises feasibility study components for Khemisset

By Josh White

Date: Tuesday 14 Jan 2020

Emmerson finalises feasibility study components for Khemisset

(Sharecast News) - Morocco-focussed potash development company Emmerson has finalised the feasibility study components for the connection to road networks, including design and cost components, for its Khemisset Potash Project in Northern Morocco, it announced on Tuesday.
The London-listed firm said the project was advantaged by industry-leading capital costs and bottom quartile all-in delivered costs to customer, yielding outstanding economic metrics including average annual life of mine EBITDA of $236m and a post-tax net present value at a 10% discount (NPV10) of $1.14bn.

It said a selection of preferred project sites was completed following a comprehensive options study, and added that the road connection design and costing was completed, with the total budgeted cost for the construction of access roads via the A2 toll road being approximately $2.0m, including a 15% contingency.

Following confirmation of zero capital cost being required at port, the company said the road connection would be the only pre-production capital expenditure required for the entire logistics solution for Khemisset.

It added that the selected site location required only around 3.2 kilometres of paved roads to be built, to connect the project to an existing high-quality highway, with an additional 9.6 kilometres of gravel internal roads included in the design estimate.

Emmerson said there was no requirement to construct expensive rail connections.

The design and budget was completed by the independent engineering group Golder Associates according to AusIMM guidelines for capital cost estimates, and the board said the full feasibility study was on track for delivery in the first half of 2020, in line with forecasts.

"We identified the location of the Khemisset project as one of its major strengths from the outset; the proximity to world class existing infrastructure is a key tangible benefit," said chief executive officer Hayden Locke.

"To be able to select a site which connects to a highway so readily and with such low capital cost allows us to save significant amounts of pre-production spend compared to the majority of potash development projects globally.

"Once connected to the A2 toll road, trucks transporting potash can drive directly to the Port of Casablanca for shipping to our customers throughout the Atlantic corridor."

Locke said that importantly, the existing roads to the port were in "fantastic" condition, requiring no additional investment, and had "significant" capacity for the trucks that Khemisset would require.

"The ability to have such a simple and cost-effective end-to-end logistics solution will benefit the project not only through financing and construction, but throughout its lifecycle.

"This is the second completed workstream item from the ongoing feasibility study, which continues to progress well and is on schedule.

"We look forward to continuing to keep the market updated with various parts of the study as we progress towards its final release during the first half of 2020."

Att 1121 GMT, shares in Emmerson were down 1.22% at 3.9p.

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